Oracle's next hunger: Systems management
A company executive said systems management was a weakness for Oracle, and it might strengthen it with acquisitions
Follow @infoworldOracle has yet to satiate its hunger for acquisitions and may turn to gobbling up systems and network management companies, an area in which it is currently weak, a company executive said Tuesday.
Currently, Oracle lacks a strong set of broad systems management and network management products, said Chuck Rozwat, executive vice president, database server technology at Oracle. "It's one area we've not been as aggressive in," he told financial analysts Tuesday at an Oracle event in New York. "Our strategy over the years has been to have a great set of products to manage Oracle databases, applications and middleware," he added.
Oracle has started to "reach out a little" to manage third-party software like BEA Systems' WebLogic and IBM's WebSphere middleware via plug-ins to its Enterprise Manager and Grid Control offerings, Rozwat said. Customers can also use plug-ins to the current Oracle management products to handle some Nortel Networks Corp.'s application switches and EMC Corp.'s Celerra storage devices.
[ See also: Oracle singles out growth areas ]
Oracle has yet to make the decision whether to build or buy additional management capabilities, Rozwat said.
The company will continue looking for potential acquisitions in general, according to Oracle President Charles Phillips. Any future purchases will probably be smaller than the $10.3 billion Oracle spent to acquire enterprise applications vendor PeopleSoft in January 2005, he noted.
"Anything we could buy would be much, much smaller than Oracle," Phillips said, with likely acquisition targets of about 1,000 employees versus Oracle's 56,000.
Having made 22 acquisitions in two years, Oracle has plenty of experience integrating purchases. "We've figured out the formula," Phillips said. The company has adopted a model of using specialist sales forces and development teams for its different products. So when Oracle buys another company, it adds the majority of any acquisition's teams of salespeople and developers to its operations, avoiding major disruptions to existing Oracle staff.
As Oracle competes with its bitter applications rival SAP AG, a key battleground is the ability to offer industry-specific applications.
To date, Oracle has focused on four key industries -- retail, public sector, banking and telecommunications -- but likely will look to acquire more expertise via future purchases, Phillips said.
"Industry applications are much more important to customers than [general-purpose] ERP, they could be bigger than ERP," he added. For instance, if his company could persuade enough banks to move to i-flex Solutions, an Indian banking software vendor in which Oracle owns a significant share, that business alone could be much larger than Oracle's general-purpose ERP (enterprise resource planning) operations, according to Phillips.
Oracle intends to become much more aggressive about offering software as a service. Oracle was an early adopter of the concept, beginning the hosting of some customers' financial and human resources applications seven years ago, Phillips said.
"Siebel gave us another 50,000 subscribers," he added. "We have a lot of backlog and are going to put a lot of firepower behind it." Oracle has already set up a huge telesales operation, Phillips said. "We have everything already; it's just a matter of execution," he added.
